In this TurboTax review, we’ll explain how it works, explore its unique features, and help determine if TurboTax is right for you. Enjoy!
Let’s face it: Preparing your income taxes can be intimidating.
All the forms, tax language, and numbers can simply feel overwhelming. What happens if you miss something? And what if you get penalized or face the dreaded audit? It’s enough to run for the hills and swear off doing your own taxes forever.
That’s where TurboTax comes in.
What is TurboTax?
TurboTax is tax preparation software developed by Intuit that allows you to file taxes online. It offers several options based on your needs – from a completely free version to one specifically for self-employed entrepreneurs.
The software’s easy interface makes taxes a breeze, even if you aren’t a tech wizard. All of TurboTax’s features are designed to save users time and take the headaches out of tax preparation.
With that said, only TurboTax Live includes live help from certified tax professionals, but other versions can still utilize the TurboTax Knowledge Base without incurring extra charges.
TurboTax Online Products
In order to serve different types of customers, TurboTax offers several different versions of their online software. Each version varies in price based on the features provided and the complexity of tax preparation.
Let’s look at TurboTax’s options to see if one fits your needs.
TurboTax Free Edition
TurboTax’s Free Edition really is free. Like, for real, it’s free. It even includes both federal and state returns!
While there isn’t really a catch, the free version is designed for very basic tax returns. So, if you need anything above some basic help, there’s a decent chance you may not qualify. The Free Edition covers W-2 income, Earned Income Tax Credit (EIC), standard deductions, child tax credits, 1099-INT, and 1099-DIV. That’s it.
Here’s what the TurboTax Free Edition doesn’t cover:
- Itemized deductions (Schedule A)
- Business or 1099-MISC income (Schedule C)
- Stock sales (Schedule D)
- Rental property income (Schedule E)
- Credits, deductions, and income reported on schedules 1-6 (like Student Loan Interest Deduction)
Despite this version being free, TurboTax still guarantees 100% accuracy. They also guarantee getting you the maximum return possible. And, they will import your information from last years’ taxes. Plus, they have a robust online community to answer questions, an Audit Support Guarantee, and an alert for when your refund lands in your bank account.
TurboTax Deluxe is the most popular TurboTax program. It also has the lowest price point of all the paid TurboTax versions. You can get TurboTax Deluxe for $60 for federal tax filing, though it’s on sale during tax season for as low as $40. State tax filing is an extra charge, usually $40 per state.
With TurboTax Deluxe, you get all the great features of the Free Edition, plus access to other features like:
Tax deductions and credits: TurboTax searches over 350 tax deductions and credits to help you take advantage of any tax breaks you may qualify for. If you itemize deductions, TurboTax helps you claim them on a Schedule A.
Charitable donations: TurboTax finds tax deductions for all your charitable giving over the course of the year.
Mortgage and property tax deductions: Your home is your biggest investment. TurboTax Deluxe helps you find tax breaks related to your home.
TurboTax Deluxe also offers one-on-one help on demand. The Deluxe version is a good fit for people with tax returns that require some extra work beyond the Free Edition.
The next tier up from TurboTax Deluxe is TurboTax Premier. This beefed up version of TurboTax is typically priced at $90 for federal tax filing, but is on sale right now for $70. Filing a state return again costs $40. With the Premier edition, you will enjoy all the features in the Deluxe version plus:
- Automatic importing of investment income from hundreds of financial institutions
- Stocks, bonds, ESPPs, rental property, and other investments
- Accurately account for gains and losses from cryptocurrency transactions
- Set up new rentals and determine fair market rent value
- Report depreciation to get your biggest tax deduction
- Deduct points, appraisal fees, and more from refinancing
- One-on-one help on demand
If you have multiple investments or rental properties, TurboTax Premier helps you take advantage of every tax break to get the biggest tax return possible.
If you are a contractor, freelancer, or small business owner, TurboTax Self-Employed is the tax prep program designed with you in mind. TurboTax Self-Employed normally costs $120 for federal tax filing but we’ve seen it as low as $90 during sales. Again, there is still an extra charge for state tax filing.
TurboTax Self-Employed finds industry-specific tax deductions others might miss. They also offer guidance specific to self-employed individuals, like how to handle expenses for mileage, cell phones, office supplies, and more.
As we mentioned earlier, this version of TurboTax was designed for the unique needs of the self-employed, including help with 1099-MISC and Schedule C tax forms. Support options for TurboTax Self-Employed include one-on-one help from self-employment specialists and on-demand one-on-one help from TurboTax specialists.
You can also easily track expenses, mileage, and jobs with free access to QuickBooks Self-Employed – which is a big deal if you’ve ever tried to keep track of these by hand. Access to QuickBooks Self-Employed also allows you to store photos of receipts and track mileage right from your phone. This program is usually $15/month, so having free access can really make a difference in running your business.
How do you know if TurboTax Self-Employed is right for you? You should use it if you are a:
- Business owner
- Independent contractor
- Sole Proprietor
TurboTax Self-Employed also covers industries such as online sales, rideshare drivers, and people with service businesses. If you use a 1099-Misc, 1099-K, or filed a Schedule C last year, then you should be using TurboTax Self-Employed.
In 2018, TurboTax added a new version of its software called TurboTax Live.
TurboTax Live allows you to purchase the above programs but with unlimited live help from a certified tax professional (CPA or EA). You can have them review your tax return to ensure nothing is missed.
TurboTax Live utilizes one-way video in which you can see them, but they can only see your screen. And you can get tax advice all year, not just at tax time. There are many times where tax advice could come in handy throughout the year, especially if you have more complicated taxes or are diving into a new situation.
If you’re a member of the military, you may be eligible for a discount for a TurboTax online product. Discounts and TurboTax versions available to you depend on your military rank or status. For active duty military and reserve personnel, you may be eligible to get a TurboTax Online product for free.
Other TurboTax Features
No matter which paid version of TurboTax you select, all of them offer features that make TurboTax the most popular tax preparation software on the market today. What makes TurboTax so valuable? Here’s a list of some of our favorite features.
If you are nervous about preparing your own taxes for fear of being audited, TurboTax provides year-round audit support guidance from a tax professional for free. They will help you understand everything you need to know about being audited and how to properly prepare in case it happens to you.
Support and On Demand Help
Although TurboTax is easy to use, there may be times you need some extra help. In those instances, TurboTax is there. With the click of the help button, you have access to tons of tax answers in their searchable knowledge base. If that’s doesn’t help, you can get on-demand tax help (for a fee) from a tax professional.
Through the TurboTax app, you can prepare taxes through your phone or tablet. You can start on one device and switch to another seamlessly. Scan your W-2 from your phone and pick up where you left off next time you are on your computer.
All TurboTax products come backed by their guarantees, which include:
Maximum Refund Guarantee: They will get you the biggest return possible or return the money you paid.
100% Accurate, Expert Approved Guarantee: TurboTax will pay your penalties and interest if they make a mistake on your tax return.
Satisfaction Guarantee: You may use TurboTax Online without a charge up to when you print or electronically file your tax return. If after you’ve purchased the program you aren’t happy, you have up to 60 days to return it with the original receipt.
Tax Tools and Tips
TurboTax offers various tools to help you prepare your taxes properly and efficiently. This includes calculators, checklists, help videos, deduction finders, and expense estimators. They cover every aspect of tax preparation no matter what version you choose.
Tax Refund Options
TurboTax gives you plenty of refund options. You can receive your tax refund by direct deposit into your checking, savings, brokerage, or IRA account. Another option is to use your tax return to buy US Savings Bonds. Although it’s not the best sounding option, you can also apply your tax refund to next year’s taxes. And yes, you can still get it by mail. Once you’ve filed your taxes, you can track your tax return online or through the TurboTax mobile app.
Pay for TurboTax with Your Tax Refund
If you use one of the paid versions of TurboTax, you have the option to have the cost subtracted from your tax return.
Where Does TurboTax Shine?
What the biggest reason TurboTax stands out from other tax preparation software? Its easy-to-use interface!
TurboTax is very clean looking when other programs (and federal tax forms) often look cluttered. It uses simple language and asks questions in an interview style, just like if you were meeting one-on-one with an accountant. This can save you enormous amounts of time since it’s done at the beginning, tailoring your tax return to your needs.
We also love the new TurboTax Live version and all the options for entrepreneurs. We think access to QuickBooks Self-Employed is also a stand-out feature.
They also have some of the best guarantees in the business, so you don’t have to worry about anything but filing your taxes. And with information carrying over from form to form and year to year, accuracy and efficiency are ensured, too.
Where Does TurboTax Fall Short?
As easy as TurboTax makes tax preparation, it does fall short of the mark at times. Compared to the other best tax preparation software programs, TurboTax is expensive. You can find substantial discounts if you check their website earlier in the tax season, though.
TurboTax offers many support options, but most of them require an extra fee. This includes on-demand support as well as TurboTax Live. If you choose to go with the free version, you are really limited on support options, though they do offer a robust online support system.
And like many other tax programs, TurboTax charges extra for filing your state tax returns. This is because there are a few states out there that don’t have state income tax (yes, really). For everyone else, though, you need to prepare to pay for (and file) both federal and state.
Who Should Use TurboTax?
The ideal TurboTax client is someone with a basic understanding of tax preparation and personal finances. Because they ask questions with such easy to understand language, TurboTax turns tax preparation into a relatively pain-free process.
The Self-Employed version is perfect for entrepreneurs and small business owners looking for a smart, simple tax preparation solution.
With that said, although TurboTax offers versions that cover things like investments and rental properties, if your taxes require a little more attention, you may be better off going with a reputable local CPA. They may be able to gauge your needs and get to know your investment portfolio a little better than online software like TurboTax.
Is TurboTax Worth It?
Looking at all the features available, we think TurboTax is worth the cost. If you are going to prepare and file your own taxes, why not use the most popular tax preparation software on the market? It’s popular for a reason, right?
TurboTax has been around for a long time and has so many features that you are sure to love. If you are ready for DIY tax preparation, TurboTax might be the tool you need to make the switch.
Do you file your own taxes with TurboTax? Why or why not?